Videoconferencing use continues to rise

The annual revenue of videoconferencing services companies for 2006 almost doubled to $607 million from $308 million in 2005, according to a recent survey.

By
Manek Dubash
| Feb 18, 2008

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The annual revenue of videoconferencing services companies for 2006 almost doubled to $607 million from $308 million in 2005, according to a recent survey. That's in spite of last week's findings that companies are only paying lip service to the notion of green computing, of which videoconferencing is seen as one element because of its ability to reduce business travel.

As the technology continues to improve and more and more IP based solutions become available, videoconferencing is becoming increasingly common, said analyst company Point Topic, which produced the videoconferencing report.

Point Topic, which surveyed UK businesses, said it found that the popularity of videoconferencing is increasing rapidly. "Fifteen percent of UK organisations report using some form of it, an increase of three percent in just six months," said John Bosnell, senior analyst at Point Topic.

The rise in the annual revenue goes side by side with the slight increase in the monthly average revenue per user (ARPU) which grew from $668 in 2005 to $679 in 2006.

As an example, videoconferencing specialist Glowpoint's annual revenue reached $19.5 million, slightly up from $18 million in the 12 months 2005 to 2006 with ARPU of $630 up more than 20 percent, said Point Topic.

This is against the backdrop of rapidly decreasing unit prices, said Point Topic. A two-room system, used to connect two sites of a company, cost up to US$30,000 in 2001. The same system was likely to cost less than US$5,000 in 2007. Service subscriptions on online videoconferencing services are rapidly growing in popularity, with prices falling from over US$200/month for a basic package to less than $100.

Related

However, videoconferencing has always rubbed up against a number of challenges, some of which are resolvable as a result of the growth of cheaper bandwidth. The main challenge of attempting normal human communication, with all its nuances and body language, via a display largely remain, although some companies are attempting to address this issue.

UK company GreenEyes is the latest: last month we reported that it has launched a desktop videophone which it claims is the most affordable way to achieve "eye-to-eye" communication in real-time.